Legislature OKs $1B bipartisan spending plan for business tax breaks, scholarships and more

By: - September 28, 2022 7:58 pm

The Michigan State Capitol in Lansing. | Anna Gustafson photo

Updated, 9:06 p.m. 9/28/22, with additional comments

During the Legislature’s final scheduled voting day before the post-election lame duck session, a $1 billion supplemental spending plan made it to the finish line as night fell in Lansing.

Senate Bills 842 and 844 have been approved by both the state House and Senate. Michigan currently has a budget surplus of roughly $7 billion.

SB 842, which provides additional funding for the School Aid Fund, includes $250 million for a post-secondary scholarship fund. The bill would appropriate $12.2 million for various FY 2023 supplemental funding, and the gross increase in appropriations would be $12.2 million for K-12 schools.

“This is going to help a lot of young kids get to college, it’s going to help our economy and it’s going to be good for a lot of people in our state,” state Sen. Jeff Irwin (D-Ann Arbor) said.

The supplemental includes $846.1 million total for SOAR (Strategic Outreach and Attraction Reserve Fund), one of the state’s economic development funds. That includes $200 million currently in SOAR that is being reauthorized, with $640 million being added.

Albert resigns as House Approps chair, opposes new bipartisan spending plan

Some of those funds could benefit lithium-ion battery manufacturer Gotion, which is headquartered in California and is a subsidiary of the Chinese company Guoxuan High-Tech Co., although it’s not clear how much. If a new Gotion facility is built in West Michigan, the company says it could invest more than $3 million and create 2,000 new jobs over the next 10 years.

SOAR funds have previously gone to Ford and General Motors.

Rep. Yousef Rabhi (D-Ann Arbor) compared the money for business incentives to a “reverse Robin Hood” move, taking “away from those who have so little and give it to those who have so much.”

Rep. Steven Johnson (R-Wayland) agreed, saying it was “robbing Peter to pay Paul.”

SB 844 also would appropriate supplemental funds to state departments through Fiscal Year (FY) 2023. An analysis prepared by the nonpartisan Senate Fiscal Agency shows that the bill includes, among other things:

  • $25 million for grants to regional and local economic development organizations
  • Infrastructure funding and grants for various projects, including those in Adrian, Pontiac and Thomas Township
  • $20 million to settle a lawsuit brought by those wrongly found to have committed fraud by the Michigan UIA (Unemployment Insurance Agency) between 2013 and 2015

The supplemental would make $133.1 million in gross appropriations and $3.4 million in General Fund/General Purpose (GF/GP) for FY 2021-22. It would make $1 billion gross, and $983.4 million GF/GP for FY 2022-23 to several state departments.

The conference report for SB 844 was adopted by the state Senate Wednesday evening with a vote of 25-8. SB 842 passed the Senate 33-0. A few hours later, the House passed SB 844 76-28 and SB 842 on a 78-26 vote. The bills now head to Gov. Gretchen Whitmer’s desk. She is expected to sign them.

“I am proud that we have reached a bipartisan deal empowering Michigan to compete for huge economic development projects, support students pursuing higher education with scholarships, and increase funding for first responders,” said Whitmer in a statement. “This bipartisan package will help us attract transformational projects bringing billions in investment and creating thousands of jobs to Michigan, lower the cost of higher education for the vast majority of Michiganders, and increase funding for law enforcement officer mental health. The supplemental is a testament to what we are capable of when we work together. Let’s keep putting Michiganders first and moving our state forward.”

Earlier on Wednesday, as appropriations leaders from both chambers were gearing up for a conference committee on the bills, state Rep. Thomas Albert (R-Lowell) resigned from his post as chair of the House Appropriations Committee. He did so while citing differences in vision with others involved in crafting the legislation, and said he opposed the “reckless and irresponsible” supplemental spending.

State Rep. Mary Whiteford (R-Casco Twp.) was then appointed by House Speaker Jason Wentworth (R-Clare) to lead the committee for the rest of the term. Whiteford cheered the bills’ passage.

“It’s imperative that we continue these investments and remain competitive as other states like Tennessee work to attract employment opportunities from auto manufacturers,” said Whiteford in a statement. “This reserve ensures Michigan retains and attracts stable, well-paying jobs and sends a message to other states that we will fight to keep them here.”

GOP gubernatorial nominee Tudor Dixon bashed the bipartisan deal for supporting Gotion, a “foreign” company.

“Why is Gretchen backing China over her own country?” Dixon tweeted Tuesday night, along with a video criticizing the move.

Dixon tweeted in support of Albert after he announced his resignation Wednesday. So did Michigan GOP Co-Chair Meshawn Maddock, who is married to state Rep. Matt Maddock (R-Milford). He was booted from the GOP caucus earlier this year.

Republican former Gov. Rick Snyder made nearly a dozen trips to China during his time in office to promote business relationships between Chinese business officials and Michigan. In all, he made 29 foreign investment missions as governor.

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Laina G. Stebbins
Laina G. Stebbins

Laina G. Stebbins covers the environment, Native issues and criminal justice for the Advance. A lifelong Michigander, she is a graduate of Michigan State University’s School of Journalism, where she served as Founding Editor of The Tab Michigan State and as a reporter for the Capital News Service. When Laina is not writing or spending time with her cats, she loves art and design, listening to music, playing piano, enjoying good food and being out in nature (especially Up North).

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